Former Finance Minister and Member of Parliament for Karaga, Dr Mohammed Amin Adam, has warned that the Court of Appeal ruling restoring the licence of GN Savings and Loans Company Limited could pose serious risks to Ghana’s financial sector stability, regulatory credibility and post-IMF recovery efforts.
His comments follow a unanimous decision by a three-member panel of the Court of Appeal quashing both the Bank of Ghana’s revocation of GN Savings and Loans’ licence and an earlier High Court judgment that upheld the action.
The appellate court also ordered the Receiver, Eric Nana Nipah of PricewaterhouseCoopers (PwC), to hand over possession, management and control of the company’s assets and operations to its shareholders.
Reacting to the ruling in a statement, Dr Amin Adam said he was “disturbed” by commentaries from government officials allegedly crediting President John Dramani Mahama for the court’s decision.
“The ruling by the Appeals Court is not just a legal development. It is a major financial-sector policy event with implications for regulatory credibility, macroeconomic stability, and Ghana’s post-IMF program outlook,” he stated.
He argued that the political context surrounding the decision could not be ignored, recalling that President Mahama had promised during the 2024 election campaign to restore licences of financial institutions he described as “wrongfully collapsed.”
“That makes it even more important to determine the interplay of politics, law and regulatory compromise,” Dr Amin Adam said.
GN Savings and Loans Company Limited, formerly GN Bank, was among several financial institutions affected during Ghana’s banking sector clean-up exercise between 2017 and 2019.
On January 4, 2019, GN Bank was reclassified as a savings and loans company and renamed GN Savings and Loans Company Limited.
Seven months later, on August 16, 2019, the Bank of Ghana revoked its licence and appointed a receiver as part of the sector clean-up.
The company’s owners, Groupe Nduom led by Dr Papa Kwesi Nduom, challenged the revocation at the Accra High Court, arguing that the action violated their fundamental human rights and was unreasonable.
However, the High Court, presided over by Justice Gifty Addo Adjei, upheld the central bank’s decision, ruling that GN Savings and Loans was unable to meet its debt obligations and that the Bank of Ghana acted lawfully in revoking the licence.
The court also rejected claims of discrimination and illegality, maintaining that the clean-up exercise was carried out in line with the central bank’s mandate.
Dr Nduom subsequently appealed the decision through his lawyer, Cletus Alengah, leading to the latest Court of Appeal ruling.
In his statement, Dr Amin Adam defended the banking sector clean-up, describing it as painful but necessary.
“The 2017–2019 banking-sector clean-up although painful was done against the fact that Ghana had a banking system carrying weak capital, poor governance, related-party exposures, liquidity pressures, and institutions that could not meet prudential requirements,” he said.
He cited reports by the International Monetary Fund (IMF) and PwC supporting the clean-up exercise as part of efforts to restore confidence and stability in the financial sector.
Dr Amin Adam warned that reversing licence revocations years later without “a transparent, rigorous supervisory reassessment” could weaken confidence in Ghana’s bank resolution framework.
“If licence revocations undertaken on prudential grounds can be reversed years later without a transparent, rigorous supervisory reassessment, market participants may begin to doubt the finality of regulatory action,” he said.
He further cautioned against what he described as potential moral hazard, fiscal and financial stability risks arising from the ruling.
“If reversals are seen as politically driven, it risks telling future bank owners that regulatory breaches can be revisited once political conditions change,” he stated.
The former Finance Minister also raised concerns about possible fiscal exposure should other collapsed institutions pursue similar legal claims against the state.
“Ghana is exiting an IMF ECF arrangement with very limited fiscal space. This is not the time to create open-ended contingent liabilities,” he warned.
Dr Amin Adam insisted that any attempt to restore the company’s operations must be preceded by fresh assessments covering capital adequacy, liquidity, governance, asset quality and depositor protection.
“A restored institution cannot simply return to the market on the basis of a court order,” he stressed.
He called on the Bank of Ghana to publicly explain the regulatory implications of the ruling and indicate whether it intended to appeal the decision.
He also urged the Ministry of Finance to disclose any potential fiscal liabilities arising from the judgment.
“Ghana cannot afford to politicize banking regulation just as it exits an IMF program,” Dr Amin Adam said.
“Financial stability is not a campaign promise. It is a national asset.”
Source: www.kumasimail.com
